As the article articulates it depends on the persons income, their expenses, their Flex plans and dependent care advantages and their types of 401k's. IMO, my wife and I keep our primary mortgage payment below 20%, which allows us a ton of disposable cash, plus we have paid it down 40k so that we have a ton of equity in the property along with appreciation which brings it to around 50-60k equity. This leaves us enough max out our 401k's at work and Roth IRA's yearly which brings our contributions to investments of index funds to 18% each. We still have enough left over to save for investments properties which I'm closing on a 178k duplex mid May which is in a great location and will cash flow conservatively around $300 to $400 a month.
So the way I approach this subject is to determine what's important to us and also to include mathematics. My wife and I prefer the security of carrying no consumer debt and only have a small mortgage to our name and soon to be a 135k mortgage on an investment property. Because we prefer piece of mind and lower risk, we will pay off our primary mortgage and put the extra cash flow towards the rental property, we'd like to have those two paid off sooner then later. With our other disposable cash flow we will save up for another investment property which although may take another 2 years, will be quite a wise approach IMO. Personally, I can't see how having multiple paid for properties in retirement all cash flowing and no mortgage payment, while investing 18% of our income in index funds to be a poor choice. An if you can do math a tax deduction isn't a credit when it comes to mortgages, so why pay the bank 10k to only get back $2,500 from the IRS, seems like poor math skills to me.
Paying off your mortgage say at a 5% interest rate, is a guarenteed return, whereas if you take that money and invest in REI or the stock market your not guaranteed a positive or negative return. Although the S&P 500 has averaged 11 to 12% before inflation since 1929, so I'm not saying it's a bad investment, because we invest a ton of money in the market, but there most recently was a meltdown of the market in 2008 and 2009 where a lot of people lost 50%, got scared and pulled out which was stupid.
So our families orders of events are to make sure the mortgage is getting paid off slowly buy surely, invest 18% in roth IRA's and 401k's and then keep buying more cash flow rentals with appreciative possibilities.
Lastly, I don't think keeping a mortgage in retirement is very wise because first of all you will need more income to pay all of your bills if you have a bunch of mortgages and credit card bills, which also increases your tax bracket. I would prefer to have minimal bills and a ton of money and paid for cash flowing properties and although I too may be in a higher tax bracket, but we'd be trying to figure out which kid to gift money too, or pay for college, or vacation somewhere or donate money too. Those are the kinds of issues I want to deal with in retirement, not payments.
